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How take-home pay works in the US

A plain-English walkthrough of gross pay, federal income tax, FICA, state tax, and pre-tax benefits — and what MyAfterTax estimates.

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Gross pay vs take-home pay

Gross pay is what your employer agrees to pay before mandatory taxes and most voluntary deductions. Take-home pay (net pay) is what lands in your bank account after withholding.

For a typical W-2 job, the gap between gross and net includes federal income tax, Social Security, Medicare (together often called FICA), state income tax where it applies, and pre-tax benefits such as a traditional 401(k) or health insurance premiums.

The main paycheck withholdings

  • Federal income tax — estimated from ordinary brackets and (in our tools) the standard deduction for tax year 2026 ($16,100 for single filers). Live paystubs also follow Form W-4 elections.
  • Social Security — employee rate of 6.2% of wages up to a $184,500 wage base for 2026.
  • Medicare — 1.45% of wages, with Additional Medicare Tax above filing-status thresholds on the return (and a withholding threshold on paystubs).
  • State income tax — none in some states, flat or graduated elsewhere. Browse the rates tables we publish for every state.

Pre-tax benefits in plain English

Some payroll deductions reduce taxable wages for income tax, FICA, or both. Traditional 401(k) contributions generally reduce federal (and often state) taxable wages but not FICA wages. Section 125 health premiums, many HSA payroll contributions, FSAs, and qualified transit benefits typically reduce both income-tax and FICA wages.

That distinction is why raising a 401(k) percentage can lower your federal estimate more than it lowers Social Security/Medicare — and why our W-2 calculator tracks separate federal / FICA / state wage bases.

What MyAfterTax estimates (and what it does not)

Our calculators are educational models built from published IRS, SSA, and state rate tables. They do not file returns, apply every credit, or model every city payroll tax. Use them to compare offers, states, and contribution choices — then confirm important decisions with a tax professional or the IRS.

Disclaimer

Educational content only — not tax, legal, or financial advice. Calculator results depend on published rates and simplified assumptions. Confirm important decisions with a tax professional or the IRS. Explore all calculators or the rates & brackets we publish.